The labour ministry is preparing a mega housing scheme to offer affordable houses to over 50 million subscribers of retirement fund body Employees' Provident Fund Organisation (EPFO), in the backdrop of the government's mission 'housing for all by 2022'.

The ministry intends to collaborate with public sector banks, housing finance companies, state-owned construction firms like National Buildings Construction Corporation and authorities like the Delhi Development Authority, Punjab Urban Planning and Development Authority, Haryana Urban Development Authority to build houses at a price to be fixed by the government.

In a recent note, the Prime Minister's Office had asked EPFO to promote affordable housing for its subscribers and use its funds for the purpose.

According to the note, deployment of 15 per cent of EPFO funds as loan for low cost housing would generate a credit flow of Rs 70,000 crore and can create 350,000 additional low-cost homes. EPFO currently manages a huge corpus of Rs 6.5 lakh-crore and its annual incremental deposit is in excess of Rs 70,000 crore.

The ministry is keen on a scheme under which EPFO subscribers could withdraw their PF deposits to make part-payment of the total cost of the house. At present, EPFO subscribers can withdraw money from their PF accounts for buying houses only after contributing for a period of five years in the schemes run by the body. The ministry also intends to provide subsidy to the EPFO subscribers in low-income bracket.

Financial institutions, sources said, would be roped in to provide housing loan at low interest rates under the priority sector lending for construction of affordable houses under the scheme. The scheme, however, will be optional for EPFO subscribers as there is no need to provide affordable houses to those who already own one.

Under the housing scheme, there would three different income categories-low income, middle income and high income. Houses and financial incentives under the scheme will be offered on the basis of the income of a subscriber.

The subscribers would be facilitated to pay equated monthly installments of the their home loan through their provident fund account.

The source said that under the scheme EPFO may use its funds to create a corpus for provide housing loan at affordable interest rate to its subscribers.

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